Business success requires tech, but the economy, trade wars make it difficult
- Worldwide spending on information and communication technologies (ICT) is projected to grow 4% annually to total $4.6 trillion by 2022, with business and government spending surpassing consumer spending as mobile device saturation increases, according to an IDC worldwide IT spending guide report.
- Several countries and regions are expected to surpass the global growth rate, with China locking in 5.2% growth and the U.S. and Latin America tying with 4.5% growth. Professional services are forecast as the fastest growing segment at 7%, with "explosive growth" in cloud infrastructure providers contributing to increased overall tech spending.
- The U.S.-China trade war is creating short-term volatility, sparking challenges and opportunities for technology organizations. Many are dependent on China for revenue and could continue to pivot away from trade relationships with the U.S., but the conflict also creates opportunities to export more to the American market. Across geographies and industries, demand for digital transformation ICT solutions in key areas such as cloud and artificial intelligence is countering the "negative sentiment" around China.
Companies increasingly need to invest in digital transformation, analytics and AI to support growth and competitiveness, though market conditions limit their ability to increase technology budgets, according to IDC.
China has become the elephant in the room of technology discussions.
In advanced fields like AI and quantum computing, the country is pouring funds into research and development, encouraging the high-tech markets China views as crucial to its Made in China 2025 strategy.
A triumvirate of home-grown technology giants are looking to conquer the global market. Trade tensions with the United States have emerged as a dominant theme during the Trump administration, with the crowning point of tension the detention of a prominent technology executive for violation of trade sanctions.
Even if the Chinese market is slowing, it's prominence as a technology center and massive market for goods and services makes it a critical player in the international tech market.
Trade talks between the U.S. and China are ongoing, though the hike in tariff rates from 10% to 25% is looming closer and closer on March 2.
Besides potential decades' worth of resounding impacts, cloud computing could be caught in the crosshairs of the trade war. The third list of tariffs the Trump administration put forward targeted some components of data center and cloud computing hardware, such as motherboards, memory modules and servers.
These tariffs could drive higher costs for businesses and consumers and force providers to reevaluate their supply chains and cost cutting measures.
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